Turning Up Heat on Banks Funding Fossil Fuels

Turning Up Heat on Banks Funding Fossil Fuels

As environmental writer and activist Bill McKibben tells Bill Moyers on this week’s Moyers & Company about the student movement for colleges and universities to divest themselves of stock from companies that produce or burn oil, gas and coal, The Wall Street Journal reports another front in the fight against climate-changing fossil fuels: the banking industry.

Investors “have filed nonbinding shareholder resolutions urging at least four banks to shed more light on loans they make to oil, gas, coal and other companies whose practices create carbon emissions. They are also pressing the banks to develop strategies to address climate-change risks…”

The pressure on banks gained traction after a Securities and Exchange Commission decision last year allowed shareholders to advance a climate-change resolution at PNC Financial Services Group Inc. Agency staff denied PNC’s request to ignore a proposal that sought to shed light on the Pittsburgh-based bank’s role as a lender to the coal industry in Appalachia, saying the resolution “focuses on the significant policy issue of climate change.” The nonbinding resolution garnered support from 22.8% of the bank’s shareholders at its April annual meeting—above last year’s 18.1% average for climate and energy-related proposals tracked by proxy adviser Glass, Lewis & Co.—but wasn’t adopted by the bank.

According to the Journal, the PNC resolution has been resubmitted and the campaign has been expanded to include Bank of America and Capital One: “The investors say banks haven’t adequately grappled with climate issues, particularly emissions stemming from loans to oil and gas companies. Regulators released guidance four years ago encouraging all public companies to disclose the effects of climate change on their businesses, but the investors say it hasn’t led to an increase in the quality or quantity of the disclosures.”

The Journal article comes almost three months after publication of Banking on Coal, a report to the United Nations released by the Rainforest Action Network (RAN), among other environmental groups, at last year’s UN Climate Change Conference in Warsaw, Poland. The report revealed, RAN noted, “the finance industry’s central role in coal mining and found that in the past eight years, 89 commercial banks provided $158 billion in financing to mining companies. Seventy-one percent of the full amount, or $112 billion, was provided by only 20 banks.

The top three banks ranked in the report are Citigroup ($9.76 billion), Morgan Stanley ($9.69 billion) and Bank of America ($8.79 billion). Among the top 20 are also Swiss, German, Chinese, British, French and Japanese banks. The authors investigated commercial lending and investment banking services provided to 70 coal-mining companies, which collectively account for 53 percent of global coal production.

According to the report to the UN, financial institutions from the United States, the United Kingdom and China have provided 57 percent of coal financing: “Since 2005 — the year the Kyoto Protocol came into force — banks’ financing for coal mining companies increased by 397 percent.”

Heffa Schücking, director of the German environmental and human rights organization urgewald and lead author of the report, said, “It’s mind-boggling to see that less than two dozen banks from a handful of countries are putting us on a highway to hell when it comes to climate change. Big banks already showed that they can mess up the real economy. Now we’re seeing that they can also push our climate over the brink.”

Michael Winship, senior writing fellow at Demos and president of the Writers Guild of America-East, was senior writer for Moyers & Company and Bill Moyers’ Journal and is senior writer of BillMoyers.com.

Further

Almost everyone hates Indiana's egregious "religious freedom" law - cue fierce backlash from businesses, churches, states, cities, legal experts and unhateful Hoosiers - but the most creative response came from an enterprising libertarian who delightedly used his new religious freedom to found the First Church of Cannabis - "One Toke, One Smile, One Love" - aimed at "celebrating all that is good in our hearts." His goal: "A House of Hemp Built with Love," and presumably lots of munchies.